KPMG is to set up the world's largest consultancy dedicated to Microsoft products, in partnership with Microsoft itself and Cisco.
The organisation will consist of two units - a systems integrator, in which all three companies will collaborate, and a 500-strong consulting practice, which does not involve Cisco. Microsoft and Cisco will both hold 10 per cent equity stakes in the joint venture.
The first non-US office will be in London and is likely to be established early next year. From this month, there will be five offices in the US, with the headquarters in Palo Alto in Silicon Valley and a large site near Microsoft's headquarters in Washington state.
The aggressive move is a critical one for both the major partners. KPMG has seized the opportunity to boost its IT operations, which are smaller than those of fellow Big Six players such as Andersen Consulting, by gambling on the success of the up and coming enterprise NT market - an area where the other consultancies are still cautious.
For Microsoft, it gives it the biggest ever endorsement from a Big Six company, just the sort of support it needs to gain credibility for its message that NT is appropriate for large enterprise projects. "Those consultancies have such massive influence over the corporate sites we want," said a Microsoft representative.
The new unit will initially have 500 employees, and will carry out its own implementations as well as supporting existing KPMG IT projects. It will focus primarily on Microsoft-based Internet commerce and knowledge management applications, although this remit will broaden with time. These two application areas are seen as critical by all the large IT consultancies - earlier this year, Andersen Consulting set up a separate division focused on Internet and knowledge management, although not specifically for NT. Another priority will be helping customers implement the forthcoming Active Directory.
Microsoft will provide technical expertise and training in the start-up phase but all the consultants in the new venture will be certified under its programmes for systems engineers and solutions developers. In a teleconference, Microsoft chief Bill Gates said "85 per cent will be certified at the highest level".
The business will standardise on using Cisco network products and its Internetwork Operating System and design technologies.
Like the Microsoft-Apple deal earlier in the week, the latest alliance is a blow for Netscape and had some observers questioning whether the browser maker can continue to compete effectively if it is missing out on such major political tie-ups. Until this deal, KPMG was a vocal supporter of Netscape in the browser war and used Navigator and Communicator internally as well as recommending it to customers. The future of its plan to build a Netscape-based Intranet called KWEB to connect 120 US offices is unknown but part of the new deal is an agreement to standardise on Microsoft's Exchange Server as its US messaging and knowledge management platform.
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